Trust Funds
A broker who holds earnest money from a buyer and the deal falls through due to a contract dispute must:
AReturn the money to the buyer immediately without question
BKeep the money in the trust account until the dispute is resolved or AREC provides guidance✓ Correct
CDeposit the money into the broker's operating account for safekeeping
DSend the money to the seller's attorney
Explanation
When there is a dispute over earnest money, the broker must keep the funds in the trust account and may not release them without the written agreement of both parties or a court order. Releasing disputed funds without authorization can result in license disciplinary action.
Related Alabama Trust Funds Questions
- After a real estate closing in Alabama, how quickly should trust funds be disbursed?
- When a broker receives a post-dated check as earnest money, the best practice is to:
- A broker's trust account must be reconciled:
- Which of the following is the correct treatment of interest earned on an Alabama broker's trust account?
- An Alabama broker may deposit their own funds into a trust account in which scenario?
- Alabama regulations require brokers to maintain trust account records for at least:
- Which of the following BEST describes 'commingling' of funds?
- A property manager collects monthly rents of $50,000 on behalf of property owners. These funds must be:
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